It is no exaggeration to say that since the 1980s, much of the American (and global) financial sector has become criminalized, creating an industry culture that tolerates or even encourages systematic fraud.

The behavior that caused the mortgage bubble and financial crisis was a natural outcome and continuation of this pattern, rather than some kind of economic accident.

It is important to understand that this behavior really is seriously criminal.

We are not talking about neglecting some bureaucratic formality. We are talking about deliberate concealment of financial transactions that aided terrorism, nuclear weapons proliferation, and large-scale tax evasion; assisting in concealment of criminal assets and activities by others; and directly committing frauds that substantially worsened the worst financial bubbles and crises since the Depression.

None of this conduct was punished in any significant way. On November 7, 2011, the New York Times published an article based on its own review of major banks' settlements of SEC lawsuits since 1996. The Times' analysis found fifty-one cases in which major banks had settled cases involving securities fraud, after having previously been caught violating the same law, and then promising the SEC not to do so again. The Times' list, furthermore, covered only SEC securities fraud cases; it did not include any criminal cases, private lawsuits by victims, cases filed by state attorneys general, or any cases of bribery, money laundering, tax evasion, or illegal asset concealment -- all areas in which the banks have numerous and major violations.

In Predator Nation, I provide detailed, well-documented accounts of behavior ranging from assisting Enron's frauds (Citigroup, Merrill Lynch), to fraudulently exploiting the Internet bubble (most of the major investment banks), to using for-profit colleges to exploit government student loan programs (Goldman Sachs), to assisting in money laundering and tax evasion on a large scale (at least eleven banks including UBS, Barclay's, and Lloyds), to using bribery and artificially complex derivatives to destroy the finances of a county government (JP Morgan Chase), to profiting from Bernard Madoff even while strongly suspecting him to be a fraud (JP Morgan Chase, UBS).

Total fines for all these cases combined appear to be far less than 1 percent of financial sector profits and bonuses during the same period. There have been very few prosecutions and no criminal convictions of large U.S. financial institutions or their senior executives. Where individuals not linked to major banks have committed similar offenses, they have been treated far more harshly.

Given this background, it is difficult to avoid the conclusion that the mortgage bubble and financial crisis were facilitated not only by deregulation but also by the prior twenty years' tolerance of large scale financial crime. First, the absence of prosecution gradually led to a deeply embedded cultural acceptance of unethical and criminal behavior in finance. And second, it generated a sense of personal impunity; bankers contemplating criminal actions were no longer deterred by threat of prosecution.

And just as the last twenty years of unpunished financialcrime constituted a green light for the bubble, so, too, America's non-response to the bubble and crisis is setting the tone for financial conduct in the future.

The Obama administration has rationalized its failure to prosecute any senior financial executives (literally, not a single one) for bubble-related crimes by saying that while much of Wall Street's behavior was unwise or unethical, it wasn't illegal. Here is President Obama at a White House press conference on October 6, 2011

:

Well, first on the issue of prosecutions on Wall Street, one of the biggest problems about the collapse of Lehmans [sic] and the subsequent financial crisis and the whole subprime lending fiasco is that a lot of that stuff wasn't necessarily illegal, it was just immoral or inappropriate or reckless....I think part of people's frustrations, part of my frustration, was a lot of practices that should not have been allowed weren't necessarily against the law.

The president and senior administration officials (such as Lanny Breuer, head of the Justice Department's Criminal Division) have portrayed themselves as frustrated and hamstrung -- desirous of punishing those responsible for the crisis, but unable to do so because their conduct wasn't illegal, and/or the federal government lacks sufficient power to sanction them. With apologies for my vulgarity, this is complete horseshit.

When the federal government is really serious about something -- preventing another 9/11, or pursuing major organized crime figures -- it has many tools at its disposal and often uses them. There are wiretaps and electronic eavesdropping. There are special prosecutors, task forces, and grand juries. When Patty Hearst was kidnapped by the radical Symbionese Liberation Army in 1974, the FBI assigned hundreds of agents to the case.

In organized crime investigations, the FBI and federal prosecutors often start at the bottom in order to get to the top. They use the well established technique of nailing lower-level people and then offering them a deal if they inform on and/or testify about their superiors -- whereupon the FBI nails their superiors, and does the same thing to them, until climbing to the top of the tree. There is also the technique of nailing people for what can be proven against them, even if it's not the main offense. Al Capone was never convicted of bootlegging, large scale corruption, or murder; he was convicted of tax evasion.

In this spirit, here are a few observations about the ethics, legalities, and practicalities of prosecution related to the bubble:

First, much of the bubble was directly, massively criminal.

Second, if you really wanted to get these people, you could. Maybe not all of them, but certainly many. Some bubble-related violations are very clear, with strong written evidence, as my book Predator Nation demonstrates. And if you flipped enough people, some of them would undoubtedly have interesting things to say about what their senior management knew. In fact, there are many techniques, venues, organizations, regulations, and statutes, both civil and criminal, available to investigate these people, punish them, and recover the money they took -- if you really wanted to. The federal government has used almost none of them.

Third, the moral argument for punishment is very strong, providing ample justification for erring on the side of aggressive legal pursuit. Whatever portion of banking conduct during the bubble was criminal, it was certainly substantial, and there is no doubt whatsoever that it was utterly, pervasively unethical, designed to defraud in reality if not in law. Since the crisis, thepeople who caused it have been anything but honest or contrite. They have been evasive, dishonest, and self-justifying, returning as quickly as possible to their unerringly selfish behavior. Their behavior caused enormous damage, both human and economic; the consequences of their wrongdoing are so large as to justify almost any action that could help to prevent another such crisis by creating real deterrence. There would also be intangible but large benefits to raising the general ethical standard of a vital industry, and one whose executives often become high-level government officials.

Given this background, let's now consider the question of criminal liability, as well as the feasibility of prosecution.

In Predator Nation I consider each of these categories in detail, naming many names and providing many specific examples. But in considering only one category, securities fraud, we already face an embarrassment of riches.

Almost all the prospectuses and sales material on mortgage-backed securities sold from 2005 through 2007 were a compound of falsehoods. But it starts even earlier in the food chain. We also know that mortgage originators committed securities fraud when they misrepresented the characteristics of loan pools, and the nature and extent of their due diligence with regard to them, when they sold pools to securitizers (and accepted financing from them). Most or all of the securitizers (meaning nearly all the investment banks and major banking conglomerates) then committed securities fraud when they misrepresented the characteristics of the loans backing their CDOs, the characteristics of the resulting mortgage-backed securities, and the nature and results of their due diligence in the process of creating those securities. The securitizers also committed securities fraud when they made similar misrepresentations to the insurers of, and sellers of credit default swap (CDS) protection on, those securities.

The executives of both originators and securitizers then committed a separate form of securities fraud in their statements to investors and the public about their companies' financial condition. They knew that they were engaging in a Ponzi-like fraud that would eventually need to end, and as the bubble peaked and started to collapse, they repeatedly lied about their companies' financial condition. In some cases they also concealed other material information, such as the extent to which they, themselves, and/or other executives of their firms, were selling or hedging their own stock holdings because they knew that their firms were about to collapse.

Next, several investment banks committed securities fraud when they failed to disclose that they were selling securities that were designed to fail so that the investment banks, and/or their hedge fund clients, could profit by betting on their failure. The Hudson and Timberwolf synthetic CDOs sold by Goldman Sachs, and which were the focus of the Levin Senate subcommittee hearings, provide a very strong basis for prosecution. Goldman's trading arm had been dragooned into finding and dumping their most dangerous assets to naive institutional investors. Important representations in the Hudson sales material--that assets were not sourced from Goldman's own inventory -- were lies, and they were material lies, since investors had learned to be wary of banks clearing out their own bad inventory. E-mail trails show that top executives closely tracked the garbage disposals and were gleeful at the unloading of the Timberwolf assets -- as they should have been, for the assets were nearly worthless within months. There have been no prosecutions.

In some cases, we already have clear evidence of senior executive knowledge of and involvement in these frauds. For example, quarterly presentations to investors are nearly always made by the CEO or CFO of the firm; if lies were told in those presentations, or if material facts were omitted, the responsibility lies with senior management. In some other cases, such as Bear Stearns, we already have evidence from civil lawsuits that very senior executives were directly involved in constructing and selling securities whose prospectuses contained lies and omissions.

The list is long. In chapters three through six of Predator Nation, I survey the financial sector's behavior during the bubble, and provide dozens of examples of major criminal behavior. Again, there have been no prosecutions.

Wall Street’s Repeat Violations,

Despite Repeated Promises

Predator Nation: Corporate Criminals, Political Corruption, and the Hijacking of America

Publication Date: May 22, 2012

Charles H. Ferguson, who electrified the world with his Oscar-winning documentary Inside Job, now explains how a predator elite took over the country, step by step, and he exposes the networks of academic, financial, and political influence, in all recent administrations, that prepared the predators’ path to conquest.
Over the last several decades, the United States has undergone one of the most radical social and economic transformations in its history.

· Finance has become America’s dominant industry, while manufacturing, even for high technology industries, has nearly disappeared.· The financial sector has become increasingly criminalized, with the widespread fraud that caused the housing bubble going completely unpunished.

· Federal tax collections as a share of GDP are at their lowest level in sixty years, with the wealthy and highly profitable corporations enjoying the greatest tax reductions.

· Most shockingly, the United States, so long the beacon of opportunity for the ambitious poor,

has become one of the world’s most unequal and unfair societies.

If you’re smart and a hard worker, but your parents aren’t rich,

you’re now better off being born in Munich, Germany or in Singapore than in Cleveland, Ohio or New York.

This radical shift did not happen by accident.

Ferguson shows how, since the Reagan administration in the 1980s, both major political parties have become captives of the moneyed elite. It was the Clinton administration that dismantled the regulatory controls that protected the average citizen from avaricious financiers. It was the Bush team that destroyed the federal revenue base with its grotesquely skewed tax cuts for the rich. And it is the Obama White House that has allowed financial criminals to continue to operate unchecked, even after supposed “reforms” installed after the collapse of 2008.

Predator Nation reveals how once-revered figures like Alan Greenspan and Larry Summers became mere courtiers to the elite. Based on many newly released court filings, it details the extent of the crimes—there is no other word—committed in the frenzied chase for wealth that caused the financial crisis. And, finally, it lays out a plan of action for how we might take back our country and the American dream.

In 1967, Mario Capecchi ventured to Harvard University, determined to study molecular biology under the great James Watson, co-discoverer of DNA. Not a man to hand out compliments easily, Watson once said

Capecchi “accomplished more as a graduate student than most scientists accomplish in a lifetime.” He had also advised the young Capecchi that he would be “fucking crazy” to pursue his studies anywhere other than in the cutting-edge intellectual atmosphere of Harvard. Still, after a few years, Capecchi had decided that Harvard was not for him. He felt that if he wanted to do great work, to change the world, he had to give himself space to breathe. Harvard, he thought, had become “a bastion of short-term gratification.”

In 1980, Mario Capecchi applied for a grant from the U.S. National Institutes of Health, which use government money to fund potentially life-saving research. The sums are huge: The NIH are 20 times bigger than the American Cancer Society. Capecchi described three separate projects. Two of them were solid stuff with a clear track record and a step-by-step account of the project deliverables. Success was almost assured.

The third project was wildly speculative. Capecchi was trying to show that it was possible to make a specific, targeted change to a gene in a mouse’s DNA. It is hard to overstate how ambitious this was, especially back in 1980: A mouse’s DNA contains as much information as 70 or 80 large encyclopedia volumes. Capecchi wanted to perform the equivalent of finding and changing a single sentence in one of those volumes—but using a procedure performed on a molecular scale. His idea was to produce a sort of “doppelganger gene,” one similar to the one he wanted to change. He would inject the doppelganger into a mouse’s cell and somehow get the gene to find its partner, kick it out of the DNA strand, and replace it. Success was not only uncertain but highly improbable.

The NIH decided that Capecchi’s plans sounded like science fiction. They downgraded his application and strongly advised him to drop the speculative third project. However, they did agree to fund his application on the basis of the other two solid, results-oriented projects.

What did Capecchi do? He took the NIH’s money and, ignoring their admonitions, poured almost all of it into his risky gene-targeting project. It was, he recalls, a big gamble. If he hadn’t been able to show strong enough initial results in the three-to-five-year time scale demanded by the NIH, they would have cut off his funding. And without their seal of approval, he would have found it difficult to find financial backing elsewhere. No funding would have been a severe setback to his career, forcing research assistants to look for other work, and potentially costing him his laboratory altogether.

In 2007, Mario Capecchi was awarded the Nobel Prize for Medicine for his work on mouse genes. As the NIH’s expert panel had earlier admitted when agreeing to renew his funding: “We are glad you didn’t follow our advice.”

The moral of Capecchi’s story is not that we should admire stubborn geniuses—although we should. It is that we shouldn’t require stubbornness as a quality in our geniuses. How many vital scientific or technological advances have foundered, not because their developers lacked insight, but because they simply didn’t have Mario Capecchi’s extraordinarily defiant character?

But before lambasting the NIH for their lack of imagination, suppose for a moment that you and I sat down with a blank sheet of paper and tried to design a system for doling out huge amounts of public money—taxpayers’ money—to scientific researchers. That’s quite a responsibility. We would want to see a clear project description, an expert opinion on the project, and preliminary research.

We would have just designed the sensible, rational system that tried to stop Mario Capecchi from working on mouse genes.

The NIH’s expert-led, results-based, rational evaluation of projects is a sensible way to produce a steady stream of high-quality, can’t-go-wrong scientific research. But it is exactly the wrong way to fund lottery-ticket projects that offer only a small probability of a revolutionary breakthrough. It is a funding system designed to avoid risks—one that puts more emphasis on forestalling failure than achieving success. Such an attitude to funding is understandable in any organization, especially one funded by taxpayers. But it takes too few risks. It isn’t right to expect a Mario Capecchi to risk his career on a life-saving idea because the rest of us don’t want to take a chance.

“Here’s the thing about failure in inno-vation: It’s a price worth paying. We don’t expect every lottery ticket to pay a prize, but if we want any chance of winning that prize, then we buy a ticket.”

Fortunately, the NIH model isn’t the only approach to funding medical research. The Howard Hughes Medical Institute, a large charitable medical research organization set up by the eccentric billionaire, has an “investigator” program that explicitly urges “researchers to take risks, to explore unproven avenues, to embrace the unknown—even if it means uncertainty or the chance of failure.” Indeed, one of the main difficulties in attracting HHMI funding is convincing the institute that the research is sufficiently uncertain.

The HHMI also backs people rather than specific projects, which allows scientists the flexibility to adapt as new information becomes available and pursue whatever avenues of research open up, without having to justify themselves to a panel of experts. It does not demand a detailed research project—it prefers to see the sketch of an idea, alongside a recent example of the applicant’s best research. It’s rather astonishing that the funding appears to be handed out with too few strings attached.

The HHMI does ask for results, eventually, but allows much more flexibility around what “results” actually are. This sounds like a great approach when Mario Capecchi is the researcher receiving the funding. But is the HHMI system really superior? Maybe it leads to too many costly failures. Maybe it allows researchers to relax too much, safe in the knowledge that funding is all but assured.

Maybe. But three economists—Pierre Azoulay, Gustavo Manso, and Joshua Graff Zivin—have picked apart the data from the NIH and HHMI programs to provide a rigorous evaluation of how much important science emerges from the two contrasting approaches. Whichever way they sliced the data, Azoulay, Manso, and Zivin found evidence that the more open-ended, risky HHMI grants were funding the most important, unusual, and influential research. HHMI researchers, apparently no better qualified than their NIH-funded peers, were far more influential, producing twice as many highly cited research articles. They were also more original, producing research that introduced new “keywords” into the lexicon of their research field, changing research topics more often, and attracting more citations from outside their narrow field of expertise.

The HHMI researchers also produced more failures; a higher proportion of their research papers were cited by nobody at all. No wonder: The NIH program was designed to avoid failure, while the HHMI program embraced it. And in the quest for truly original research, some failure is inevitable.

Here’s the thing about failure in innovation: It’s a price worth paying. We don’t expect every lottery ticket to pay a prize, but if we want any chance of winning that prize, then we buy a ticket. In the statistical jargon, the pattern of innovative returns is heavily skewed to the upside; that means a lot of small failures and a few gigantic successes. The NIH’s more risk-averse approach misses out on many ideas that matter.

It isn’t difficult to see why a bureaucracy, entrusted with spending billions of taxpayer dollars, is more concerned with minimizing losses than maximizing gains. And the NIH approach does have its place. The Santa Fe complexity theorists Stuart Kaufman and John Holland have shown that the ideal way to discover paths through a shifting landscape of possibilities is to combine baby steps with speculative leaps. The NIH is funding the baby steps. Who is funding the speculative leaps?

Tim Harford is an English economist, journalist, and author of Adapt: Why Success Always Starts With Failure. Tim was a 2011 TEDGlobal speaker.

ed il mare è proprio a due passi

negli orti locali ancora coltivano frutta e verdure

in modo sano

per non parlare dell'olio dell'Oliva Taggiasca

ho nuovi amici ed amiche

c'àggià voleer à cchiù ?

""People do not normally demonstrate deep feelings. Obviously they experience sorrow, desire and love “somewhere”, but they try not to realise it and not to let it be realised, so as not to seem too fragile or too dependent.

In general people try to get others to do certain things, but they rarely ask plainly for what they want as they fear rejection in the same way they did when they were children. People often react angrily to frustrations or grief. In this way they do not change reality, but only their own contact with reality. In the same way they do not get angry or battle when there is need to battle, for fear of “exaggerating”. In the most wretched situations people do not know how to cry or do so out of self-pity or anger.""

The Jobs Stall

The White House must be telling itself there are still five months between now and Election Day, so the jobs picture could brighten. After all, we went through a similar mid-year slump in 2011 but came out fine.

But however you look at today's jobs report, it's a stunning reminder of how anemic the recovery has been -- and how perilously close the nation is to falling into another recession.

Not only has the unemployment rate risen for the first time in almost a year, to 8.2 percent, but, more ominously, May's payroll survey showed that employers created only 69,000 net new jobs. The Labor Department's Bureau of Labor Statistics also revised its March and April reports downward.

Only 96,000 new jobs have been created, on average, over the last three months.

Put this into perspective. Between December and February, the economy added an average of 252,000 jobs each month. To go from 252,000 to 96,000, on average, is a terrible slide. At least 125,000 jobs are needed a month merely to keep up with the growth in the working-age population available to work.

Face it: The jobs recovery has stalled.

What's going on?

Part of the problem is the rest of the world.

Europe is in the throes of a debt crisis and spiraling toward recession.

China and India are slowing.

Developing nations such as Brazil, dependent on exports to China, are feeling the effects

and they're slowing as well.

All this takes a toll on U.S. exports.

But a bigger part of the problem is right here in the United States, and it's clearly on the demand side of the equation. Big companies are still sitting on a huge pile of cash. They won't invest it in new jobs because American consumers aren't buying enough to justify the risk and expense of doing so.

Yet American consumers don't have the cash or the willingness to spend more.

Not only are they worried about keeping their jobs, but their wages keep dropping. The median wage continues to slide, adjusted for inflation. Average hourly earnings in May were up 2 cents -- an increase of 1.7 percent from this time last year -- but that's less than the rate of inflation. And the value of their home -- their biggest asset by far -- is still declining. The average workweek slipped to 34.4 hours in May.

Corporate profits are healthy largely because companies have found ways to keep payrolls down -- substituting lower-paid contract workers, outsourcing abroad, using computers and new software applications.

But that's exactly the problem.

In paring their payrolls, they're paring their customers.

And we no longer have any means of making up

for the shortfall in consumer demand.

Federal stimulus spending is over. In fact, state and local governments continue to lay off large numbers. The government cut 13,000 jobs in May. Instead of a boost, government cuts have become a considerable drag on the rest of the economy.

Republicans will have a field day with today's jobs report, taking it as a sign that Obama's economic policies have failed and we need instead their brand of fiscal austerity combined with more tax cuts for the wealthy.

the economy as a campaign strategy and what do you get?

You get today's terrible jobs report.

Manufacturing Illusions

Chancellor's Professor of Public Policy, University of California at Berkeley;

Author, 'Aftershock'

Suddenly, manufacturing is back -- at least on the election trail.

But don't be fooled.

The real issue isn't how to get manufacturing back.

It's how to get good jobs and good wages back.

They aren't at all the same thing.

Republicans have become born-again champions of American manufacturing. This may have something to do with crucial primaries occurring next week in Michigan and the following week in Ohio, both of them former arsenals of American manufacturing.

Mitt Romney says he'll "work to bring manufacturing back" to America by being tough on China, which he describes as "stealing jobs" by keeping value of its currency artificially low and thereby making its exports cheaper.

Rick Santorum promises to "fight for American manufacturing" by eliminating corporate income taxes on manufacturers and allowing corporations to bring their foreign profits back to American tax free as long as they use the money to build new factories.

President Obama has also been pushing a manufacturing agenda. Last month the president unveiled a six-point plan to eliminate tax incentives for companies to move offshore and create new lures for them to bring jobs home. "Our goal," he says, is to "create opportunities for hard-working Americans to start making stuff again."

Meanwhile, American consumers' pent-up demand for appliances, cars, and trucks have created a small boomlet in American manufacturing -- setting off a wave of hope, mixed with nostalgic patriotism, that American manufacturing could be coming back. Clint Eastwood's Super Bowl "Halftime in America" hit the mood exactly.

But American manufacturing won't be coming back .

Although 404,000 manufacturing jobs have been added since January 2010, that still leaves us with 5.5 million fewer factory jobs today than in July 2000 -- and 12 million fewer than in 1990. The long-term trend is fewer and fewer factory jobs.

Even if we didn't have to compete with lower-wage workers overseas, we'd still have fewer factory jobs because the old assembly line has been replaced by numerically-controlled machine tools and robotics. Manufacturing is going high-tech.

Bringing back American manufacturing isn't the real challenge, anyway. It's creating good jobs for the majority of Americans who lack four-year college degrees.

Manufacturing used to supply lots of these kind of jobs, but that was only because factory workers were represented by unions powerful enough to get high wages.

That's no longer the case. Even the once-mighty United Auto Workers has been forced to accept pay packages for new hires at the Big Three that provide half what new hires got a decade ago. At $14 an hour, new auto workers earn about the same as most of America's service-sector workers.

GM just announced record profits but its new workers won't be getting much of a share.

In the 1950s, more than a third of American workers were represented by a union. Now, fewer than 7 percent of private-sector workers have a union behind them. If there's a single reason why the median wage has dropped dramatically for non-college workers over the past three and a half decades, it's the decline of unions.

How do the candidates stand on unions? Mitt Romney has done nothing but bash them. He vows to pass so-called "right to work" legislation barring job requirements of union membership and payment of union dues. "I've taken on union bosses before," he says, "and I'm happy to take them on again." When Romney's not blaming China for American manufacturers' competitive problems he blames high union wages. Romney accuses the president of "stacking" the National Labor Relations Board with "union stooges."

Rick Santorum says he's supportive of private-sector unions. While in the Senate he voted against a national right to work law (Romney is now attacking him on this) but Santorum isn't interested in strengthening unions, and he doesn't like them in the public sector.

President Obama praises "unionized plants" -- such as Master Lock, the Milwaukee maker of padlocks he visited last week, which brought back one hundred jobs from China. But the president has not promised that if reelected he'd push for the Employee Free Choice Act, which would make it easier for workers to organize a union. He had supported it in the 2008 election but never moved the legislation once elected.

The president has also been noticeably silent on the labor struggles that have been roiling the Midwest -- from Wisconsin's assault on the bargaining rights of public employees, through Indiana's recently-enacted right to work law -- the first in the rust belt.

The fact is, American corporations -- both manufacturing and services -- are doing wonderfully well. Their third quarter profits totaled $2 trillion. That's 19 percent higher than the pre-recession peak five years ago. But American workers aren't sharing in this bounty. Although jobs are slowly returning, wages continue to drop, adjusted for inflation.

The fundamentalproblem isn't the decline of American manufacturing, and reviving manufacturing won't solve it.

to deal with an economy today.

Stop the Austerity Train Wreck!

The biggest question right now on Planet Washington is whether the congressional supercommittee will reach an agreement.
.
That’s the wrong question. Agreement or not, Washington is on the road to making budget cuts that will slow the economy, increase unemployment, and impose additional hardship on millions of Americans..The real question is how to stop this austerity train wreck, and substitute the following

:
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First: No cuts before jobs are back — until unemployment is down to 5 percent. Until then, the economy needs a boost, not a cut. Consumers — whose spending is 70 percent of the economy — don’t have the money to boost the economy on their own. Their pay is dropping and they’re losing jobs.
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Second: Make the boost big enough. 14 million Americans are out of work, and 10 million are working part time who need full-time jobs. The president’s proposed jobs program is a start but it’s tiny relative to what needs to be done. It would create fewer than 2 million jobs. We need a big jobs program — rebuilding America’s crumbling infrastructure, and including a WPA and Civilian Conservation Corps.
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Third: To pay for this, raise taxes on the super-rich. It’s only fair. Never before has so much income and wealth been concentrated at the very top, and taxes on the top so low. Go back to the 70 percent marginal tax we had before 1980. And include more tax brackets at the top. It doesn’t make sense that any income over $375,000 is taxed at the same 35 percent, even if it’s a billion dollars. And tax all sources of income at the same rate, including capital gains.
.
Fourth: Cut the budget where the real bloat is. Military spending and corporate welfare. End weapons systems that don’t work and stop wars we shouldn’t be fighting to begin with, and we save over $300 billion a year. Cut corporate welfare — subsidies and special tax breaks going to big agribusiness, big oil, big pharma, and big insurance — and we save another $100 billion.
.Do you hear me, Washington? Do these four things and restore jobs and prosperity.

In Greece, fears that austerity

is killing the economy

Prepare for a Different Financial Landscape

by Mohamed A. El-Erian
.

With the European crisis continuing to dominate the news, many people now realize that today’s global economy faces an unusually uncertain outlook. Indeed, Europe’s turmoil is but one of the multiple global re-alignments in play today. What may be less well-recognized is the extent to which specific sectors are already changing in a consequential and permanent manner.
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This is particularly true for global finance where volatility has increased, liquidity is evaporating, and the role of government is pronounced but inconsistent. This is a sector where the functioning of markets is changing, along with the outlook for institutions. The implications are relevant for both economic growth and jobs.
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The recent volatility in financial markets — be it the dizzying swings in equities around the world or the fragmentation of European sovereign bonds — far exceeds what is warranted by the ongoing global re-alignments. We are also seeing the impact of a consequential shift in underlying liquidity conditions — or the oil that lubricates the flow of the credit and the related ability of savers and borrowers to find each other and interact efficiently.
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Facing a range of internal and external pressures, banks seem to be limiting the amount of capital that they devote to market making. Combine this with the natural inclination of many market participants to retreat to the sidelines when volatility and uncertainty increase, and what you get is a disruptive combination of higher transaction costs, reduced trading volumes, and abrupt moves in valuations.
.We are also witnessing a loss of trust in instruments that many market participants — from corporations to individual investors and institutional ones — use to manage their balance sheet risks. The reduced ability to hedge current and future exposures is even forcing some to transition from using markets to manage their “net” exposures to simply reducing gross footings.
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Meanwhile western banks, whether they like it or not (and most do not), are now embarked on a journey — away from what some have called “casino banking” to what others label as the “utility model.” Whether in America or in Europe, banks are under enormous pressure from both the private and public sectors to become less complex, less levered, less risky and more boring.
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By withholding new credit, private creditors are forcing certain banks to de-lever — a process that is amplified by the sharp decline in bank stocks and the accompanying erosion in capital cushions. At the same time, the banks’ traditional global dominance is under growing competitive pressures from rivals headquartered in healthy emerging economies.
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The result of all this is a further, across-the-board shrinkage in the balance sheet of the western banking system. This is led by Europe where some institutions (e.g., in Greece) are also experiencing meaningful deposit outflows.
.After the 2008-09 debacle of the global financial crisis, governments also want their banks to be better capitalized and more disciplined. And while implementation has been both far from consistent and less than fully effective, the intention is clear: Much tighter guard rails and better enforcement to preclude any repeat of the wild west experience of over-leverage, bad lending practices, and inappropriate compensation approaches.
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The influence of central banks and governments are also being felt in other ways that impact the functioning and efficiency of markets. Some of the implications are visible and largely knowable while others, by their very nature, are unprecedented and therefore less predictable.
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For three years now, central banks have been pursuing a range of “unconventional policies,” particularly in America and Europe. The goal has been to reduce the probability of prolonged recessions and severe financial dislocations.
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In doing so, central banks have gone well beyond their prudential supervisory and regulatory roles. They have become important direct participants in markets — essentially using their printing presses to buy selective securities, and doing so not on the basis of the usual commercial criteria that anchor the normal functioning of markets.
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Market predictability is also being impacted by the erosion in the standing of sovereign risk in the western world. The cause is the twin problem of way too little economic growth and way too much debt. The effect is a less stable global financial system now that there are fewer genuine “AAA” anchoring its core..
All this will translate into a very different financial landscape. The change will be most pronounced for banks..
Look for western banks to be less complex, less global, somewhat less inter-connected and, therefore, less systemic. With some banks teetering on the edge, certain European governments (e.g., Greece) will have no choice but to nationalize part of their financial system.
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Also, with the western banking system shrinking in scope and scale, look for new credit pipes to be built around those that are now clogged. With the aim of supporting growth and jobs, particularly in longer-term investments such as infrastructure, some of these pipes will be directed or enabled by governments.
.Have no doubt, the financial landscape is rapidly evolving. Some of the changes are deliberately designed and implemented. Others are being imposed by the quickly changing reality on the ground..
The ultimate destination is a smaller and safer financial services sector. When we get there, a better balance will be struck between private gains and the common good. Banks will be in a better position to serve the real economy without exposing it to catastrophic risk and harmful abuses.
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The next few months will shed light on the extent to which governments and, to a lesser extent, business leaders are able to properly orchestrate the process.

The more they fall short, the less growth and fewer jobs there will be.

Why We Need a Renaissance

- Economically and Ethically

Leo Hindrey, Jr

Chairman, U.S. Economy/Smart Globalization Initiative at the New America Foundation

Anyone deeply concerned about the current almost unprecedented real unemployment rate of more than 18% and about the ongoing jobless recovery must first focus on resuscitating our depleted manufacturing sector. Especially given the current political mood in Washington concerning new federal expenditures, this focus will necessarily require the Obama administration to seriously rethink its approach to trade, particularly toward China.

There are many economic imperatives behind this conclusion. At the same time, the ethical imperative for (again) having a robust manufacturing sector is central to our national well-being. Yet just as the economic imperatives are often overlooked, so is the ethical imperative very often dismissed out of insensitivity or otherwise put aside in deference to our culture of greed.

Structurally speaking, no economy as large, complex and geographically far-flung as ours can prosper over the long term with less than 20-25% of its workers being in manufacturing and without the sector contributing a similar percentage of GDP. Yet as it is, only around 9% of Americans now work in manufacturing, and as a percent of our GDP, the sector provides just 11% of the total.

The proof of this conclusion is found in history, starting with the forty years leading up to the Second World War, when the percent of U.S. employment in manufacturing was a fairly consistent 30% or so, and followed by the three decades thereafter, when, despite the introduction of new service sector jobs as post-War manufacturing incomes rose, such percent still consistently hovered at around 25%. These seventy years of robust manufacturing were -- it's no coincidence -- generally robust years for the middle class as well, hallmarked by wide-scale new home construction and new car ownership, quality public school education for the nation's youth, and fair salaries with relatively little income inequality.

Beginning in the early 1980s, however, five Presidents in a row have actively in some cases or passively in others presided over a dramatic decline in the number of workers in our manufacturing sector. Today only nine out of every hundred American workers earn their living in manufacturing. So it is -- again no coincidence -- that in the last twenty years, wages for 90% of our workers have been stagnant, we have more income inequality than ever before, and we buy from overseas $260 billion more manufactured goods than we export.

America's trade imbalance alone is now so great that, as the economist Peter Morici of the University of Maryland has calculated, the U.S. economy, measured over just the last ten years, is a staggering $1.5 trillion smaller than it would have been otherwise. As Morici has written, so long as imports to the U.S. of manufactured goods substantially exceed our exports of such products,

Americans "must consume much more than the incomes they earn producing goods and services, otherwise the demand for what they make is inadequate to clear the shelves, inventories pile up, layoffs result, and the economy goes into recession."

Nineteen members of the G-20 have very precise national manufacturing & industrial policies -- call them what you will -- which in each case has the support of all branches of government and the big business community. America alone does not. And among these nineteen countries, Germany, Japan and China most stand out for comparison with the U.S. because they are the countries that every day are excelling in global trade while we are losing out.

Germany, with 22% of its employees working in manufacturing and 25% of its GDP coming from the sector, is renowned forunderstanding the unique role that government must play in a globalized market economy; for encouraging strong partnerships between labor unions and business; and for balancing its foreign trade by essentially demanding that each shipload of imports scheduled to come into Germany have a corresponding shipload of German exports scheduled to leave the country. The result of all of this, as David Leonhardt of the New York Times has written (6-07-11), is that the German economy consistently grew faster than ours since the middle of the last decade and it recovered much more quickly from the financial crisis of 2007.

In contrast with Germany's rules-based industrial policy, much has been written about how China has gained unfair trade advantages through its lack of meaningful environmental and labor standards, currency manipulation and other subsidies, highly restrictive limitations on foreign goods purchases, and demands that countries seeking to do business in China first make massive transfers to it of their intellectual property. These actions and practices of China under its industrial policy -- albeit very often illegal -- have, nonetheless, been highly effective: China just a year ago passed Japan to become the world's second-largest economy and passed Germany to become the world's biggest exporter, and as early as 2030, it will likely pass the U.S. to become the world's biggest economy.

By not having our own manufacturing & industrial policy and by persisting with corporate tax policies that are in conflict with the objective of having a robust domestic manufacturing sector, between 1998 and 2010 we lost approximately six million manufacturing jobs overseas, with more than two million of these occurring from 2007-2009.

In just the years between 2002 and 2006, China added 11 million manufacturing jobs to its rolls, which are as many manufacturing jobs as we now have left in total in America.

Even the Obama administration, despite countless promises to the contrary during the '08 campaign, quickly fell into the "a job is a job" fallacy while at the same time it's failed to hold China responsible for its illegal trade practices. Just six months after the Inauguration, on June 19, 2009, Larry Summers, the administration's Director of the National Economic Council, said that to make up for the millions of offshored manufacturing jobs, all we need to do as a nation is focus on exporting "computer software, movies, university degrees and management consulting and legal services." This is an absurd conclusion -- and unachievable by any measure -- yet it has seemingly informed the Obama administration's jobs policy since day one. And as for its failure to move against China, the Obama administration, despite professing to recognize the need to address unbalanced trade and rebuild U.S. exports, has in practice done little more than hope quixotically that a combination of green energy efforts, ever more services and new free trade agreements will magically revitalize American exports.

And then the administration wonders why workers and voters in towns like Flint, Dayton, Wichita and Buffalo are having conniption fits.

In sum, America, with just 9% or so of its employees working in manufacturing, suffers economically in multiple ways when it competes against large-scale trading partners which, percent-wise, have multiples more workers in the sector. We suffer in the magnitude of our trade deficit, the progressiveness of our average wage, the extent of income inequality, the amount of our federal indebtedness, and the pressures put on our nation's state and municipal budgets.

But every bit as critical as the economic imperatives for having a manufacturing & industrial policy of our own is the ethical imperative.

Exceeded only by the responsibility to defend itself, a nation must seek to create an economic environment that give its workers employment opportunities that provide fair compensation, safe working conditions and an absence of discrimination and are compatible with their skills and capabilities. Taking these objectives in order, for at least the last twenty years the average wage of 90% of America's workers has been stagnant, which means we are clearly failing this obligation. As for safe working conditions, we should be pleased where we are generally, excepting only in coal mining. And as for non-discrimination in hiring, going all the way back to the Kennedy-Johnson era we can generally be proud of what we've accomplished as a nation, excepting only fair employment of the LGBT community.

Where I would contend we are truly falling down in major way on a nation-wide level is in not better reacting to the other form of discrimination plaguing the American workforce, which is the decades-long elimination of millions of manufacturing jobs that would better meet the skills and capabilities of workers who have instead been shoved into low-skill, low-reward service jobs.

Last year in a moving and sobering documentary produced by HBO called The Last Truck, we watched the shutting down of a General Motors truck plant in Dayton, Ohio. When the last light in the plant was shut off, which is literally how the film ended, thousands of highly-skilled manufacturing jobs were eliminated -- jobs which had provided fair wages and benefits, matched well individual skills with job requirements, and instilled a sense of camaraderie throughout the community.

Let me elaborate.

Individual dignity and national interest align on the desire to reduce economic inequality and in matching education and skill sets to jobs. And communities and a nation are in trouble when people feel they are being left behind. But right now in America, unless you are in the top 10% of the national economy, this feeling is becoming all too common.

There are many proven predictors of performance in all occupations. For example, we know that the aptitude required to be successful as a professional or technical worker is much higher on average than the aptitude of the average unskilled worker. We also know that the aptitude required to be a successful skilled manufacturing worker or craftsman is much higher on average than the aptitude of the average semi-skilled or standard service worker.

While one needs to be extremely sensitive and careful when trying to correlate jobs with aptitude, three conclusions can be drawn:

• First, it is irresponsible to tolerate a national employment picture that, according to a recent Pew Research study, has 40% of Americans reporting that they have more qualifications than their job requires.

• Second, it is irresponsible to tolerate a national employment picture that has room for only 9% of workers to be employed in skilled manufacturing, since by inference this means that millions of American workers have been and will continue to be shoved down into service jobs far below their aptitudes and capabilities, with all the attendant frustrations and unwarranted lower standards of living which this carries with it.

• Third, it is irresponsible to have as a stated national goal seeing every high school graduate in turn graduate from college, which is both unachievable in fact and cruel in the false expectations it engenders in young people whose long-term employment would be better found as skilled workers and craftsmen. A college degree is not the only path to success, especially a degree from a college with low admission standards and given the reality that among high school students who graduate in the bottom 40% of their classes, two-thirds will still not have earned diplomas eight and a half years later (Office of Texas Workforce Commission, 5-26-11).

America's economy, social cohesion and dignity, and Americans' optimism -- in short, America's traditional strength -- all rest on a thriving middle class which in turn rests on a thriving manufacturing sector.

We have benignly and actively neglected this sector for far too long, and regardless of who wins the 2012 election, we need to focus on these manufacturing, trade and education-related issues if we want to have a healthy, vibrant, ethically sound nation moving forward.Today millions of American workers are suffering otherwise. Tomorrow, the very idea of America will suffer.

Leo Hindery, Jr. is Chairman of the US Economy/Smart Globalization Initiative at the New America Foundation and a member of the Council on Foreign Relations. Currently an investor in media companies, he is the former CEO of Tele-Communications, Inc. (TCI), Liberty Media and their successor AT&T Broadband. He also serves on the Board of the Huffington Post Investigative Fund.

For fully two decades, the American people have been fed the canard that the offshoring of literally millions of American manufacturing jobs is an acceptable price to pay for lower cost imported consumer goods.

Yet indisputably, we now know from work done by the non-partisan Center for Economic and Policy Research and others, especially including Lori Wallach and Michael Mandel, that for the vast majority of Americans, the gains in lower prices from trade are being outweighed by wage losses - meaning net losses for most American workers.

We also know from ongoing work by Mandel that shifting production overseas has inflicted far worse damage on the U.S. economy than the numbers show. Because of persistent flaws in the data fed us by the Bureau of Labor Statistics, the growth of domestic manufacturing is substantially overstated which means that productivity gains and overall economic growth have been overstated as well. Offshoring to low-cost countries is in fact creating reported gains in GDP that don't correspond to any actual domestic production. This "phantom GDP" helps explain why U.S. workers aren't benefiting more as their companies grow ever more efficient.

All of this seems esoteric until you reflect on the fact that we are tearing the core out of our economy and, in my opinion, the very heart and soul out of society as those in big business and their supporters in Congress try to justify

and perpetuate a form of globalization that has:

Reduced our nation's manufacturing sector to less than half of what it needs to be in size and import;

Seen China -- just this past weekend -- pass Japan to become the world's second largest economy, thanks almost entirely to the dominance China has gained from being the beneficiary of nearly thirty years of grossly unbalanced (and unfair) offshoring by the U.S.

The insidiousness of offshoring is three-fold. Yet the recent pronouncements from the administration about revitalizing American manufacturing fail to address them.

First, from its high point in the summer of 1979, employment in manufacturing has fallen from 19.7 million jobs to only 11.6 million today, with 6-plus million of this decline coming just since 1997, when China's trade with the U.S. first exploded. Less than 9% of Americans now work in this sector.

And as a percent of GDP, manufacturing is now just 11.2% of the total; it would be closer to 10.5% if the BLS properly counted the 25% imported component portion of American production as 'domestically made'. Today's meager GDP figure is down dramatically from 14.2% just a decade ago and a consistent 25-30% during the first twenty-five years after WW II.

No economy as large and complex as ours can prosper

with less than 20-25% of its workers being in manufacturing

and without the sector contributing a like percentage of GDP.

Yet there has been no commitment to driving the sector back to these higher levels

of employment and economic contribution.

And without such targets in place, the U.S. Chamber of Commerce and the Business Roundtable -- Mr. Obama's new "BFFs" -- and others take the position that because the number of manufacturing workers in the U.S. is rising again (albeit only modestly and probably only temporarily), then anything more than modest palliatives would be an over-correction. After all, we've seen General Electric bring back to the U.S. from China all of 400 jobs (USA Today, 8-06-10), and "rising industrial production and capital investments are signs that manufacturing will remain a significant part of the U.S. economy at least in the near term" (Wall Street Journal, 1-19-11). Surely, there is no need for anything as dramatic as having our own National Manufacturing & Industrial Policy to match the mercantilist practices of China and our other major trading partners.

Second, offshoring is always described by its proponents as nothing more than moving jobs to 'lower-cost' countries, in our case most obviously to China.

What is not discussed is that fully 90% of these lower costs are not labor-based, but rather they are the unfair combination of environmental degradation, illegal subsidies, currency manipulation and intellectual property theft, with which no American company or worker can ever compete - nor should they.

Yet, the administration has to date specifically excluded trade reform from its 'boosting manufacturing' initiatives.

Third, we have finally come to appreciate that American corporations committed to offshoring have almost universally been providing their foreign suppliers and overseas subsidiaries with massive amounts of business knowledge, management practices, training and other intangible exports. Almost none of this activity is picked up in the BLS's shoddy and, I would argue, irresponsible data gathering, but it is the proverbial second shoe to drop. And a very big shoe it is.

This massive transfer of intellectual property is what will ultimately

be the biggest drain on our economy.

As Peter Cohan of Daily Financehas written, General Electric "believes that China will be a $400 billion market for its aircraft products over the next two decades", with the preponderance of such sales being products manufactured in GE facilities relocated from the U.S. and using American-conceived technologies. Cohan goes on to note that "if China follows Taiwan's footsteps [in semiconductors], its aircraft industry should surpass the US's in a much shorter time".

President Obama, according to the New York Times (1-21-11), has started making the case that the United States has moved past economic crisis mode and is entering "a new phase of our recovery," which demands an emphasis on job creation. "The past two years were about pulling our economy back from the brink," he says, and "the next two years, our job now is putting our economy into overdrive." He is finally talking about revitalizing manufacturing as an important part of his jobs creation initiative, although this should absolutely have been an immediate post-Inauguration imperative rather than a February 2011 'now it's time' undertaking.

The specific vehicle that Mr. Obama has chosen to advance his jobs agenda is a new Council on Jobs and Competitiveness, to replace the Economic Recovery Advisory Board chaired by Paul Volcker. The chair of the new Council is Jeffrey Immelt of GE. All of this is consistent with the President's expressed 'transition' from economic recovery to job creation.

The challenges for the new Council will be three.

First, its mandate has to unequivocally include trade reform, because job creation and trade reform -- especially our trade with China -- are inextricably linked. In this regard, Mr. Obama has made a curious choice to be chair of this new Council, as few multinational corporations have benefited more from our current flawed definition of globalization -- or from China's unfair trade practices -- than has Mr. Immelt's company, GE.

(The Obama administration's track record on avoiding conflicts of interest in economic policy areas already has been called into question by the President's choice of James McNerney of the Boeing Company to head his Export Council. Boeing, like GE, is completely joined at China's economic hip, while planning every day to ship ever more U.S. machinist jobs to Mexico and throughout the company's global web of suppliers and component part manufacturers.)

Second, if the Council gets a trade reform agenda, it must be a fair trade reform agenda -- and that must mean no Free Trade Agreements (or FTAs) based on discredited NAFTA and Bush administration principles. Yet in his January 21st guest column in the Washington Post Mr. Immelt made clear his support of the recently concluded South Korea FTA, an FTA which indisputably failed to put the interests of American workers ahead of the interests of large global corporations, which has to be the primary standard for any FTA.

Third, the Council on Jobs and Competiveness must, as its name implies, take the strongest possible exception to further unwarranted offshoring of American jobs. Yet GE's own history on this issue is checkered at best, especially in its dealings with China. Also, its ongoing significant financial support of the U.S. Chamber of Commerce -- the 'big dog' when it comes to supporting offshoring -- is certainly not an encouraging sign of resoluteness in the future. As Alan Beattie wrote recently in the Financial Times, "many U.S. multinationals are far more interested in investing in China than exporting there." Historically, GE has been one of those multinationals..

Because the President has made job creation the focus of the next two years, let me close with some observations on what happens if as a nation we fail in this task.

In an article written last Friday (2-11-11) by Matt Bai of the New York Times, he concluded that Mitt Romney's speech that day to the Conservative Political Action Conference which called today's job fairs and unemployment lines "President Obama's Hoovervilles" was misplaced. Specifically, said Bai, "It would be hard to construct a compelling case, based on any fair reading of political and economic history, for linking Mr. Obama's term thus far to that of the most maligned president of the last century."

However, as Rick Sloan, who is the Machinists Union's communications director, has noted, while Romney's analogy may not be exactly spot on, the results of the November 2 elections offer us a preview of the 2012 campaign if real unemployment in America is not down dramatically from today's dismal levels of 18.1% and 28.9 million. Thirty percent of the turnout last November came from jobless households, and nationally this vote split only 50 to 46 for Democrats, which, Mr. Bai, is not exactly an FDR-style landslide a la 1934.

The world of hurt that the millions of jobless in America have endured will not be easily forgotten, especially if the most recent solution put forward on their behalf -- i.e., the Council on Jobs and Competitiveness -- is flawed at the onset in its formation and thereafter in its execution.

Leo Hindery, Jr. is Chairman of the US Economy/Smart Globalization Initiative at the New America Foundation and a member of the Council on Foreign Relations. Currently an investor in media companies, he is the former CEO of Tele-Communications, Inc. (TCI), Liberty Media and their successor AT&T Broadband. He also serves on the Board of the Huffington Post Investigative Fund.

No Contract, No Cookies:

Is This the Way a Country Crumbles?

Isn't a 'jobless recovery' as preposterous as a fetus-less pregnancy? We've got a bloody pile-up at the intersection of Wall Street and Main Street, where reality collides with such corporate conceits. And it's the workers who wind up on life support, while the suits speed away from the wreckage undented and undaunted. Back to the bat cave, to plot the next leveraged buyout!

The new HBO documentary, No Contract No Cookies: The Stella D'Oro Strike, premiering on HBO2 tonight at 8pm, tells the story of a beloved Bronx bakery, founded by Italian immigrants in 1932, that now lies shuttered, like so many factories all over America. The saga of how the company went from a thriving family-owned enterprise to a gutted equity fund acquisition is a success story only if you're rooting for our modern day robber barons. For the dwindling middle class and the unwashed masses, it's an American tragedy that's being repeated all over the country.

No Contract No Cookies puts a poignant face -- or 138 faces, to be precise -- on the massacre of manufacturing jobs that CEOs routinely commit in the name of prosperity. At the Stella D'Oro factory, folks from 22 different countries worked convivially alongside New York natives and gained a foothold in the American middle class, only to be kicked off the ladder when Brynwood Partners, a private equity fund, bought the company. In 2008, when the workers' contract expired, Brynwood demanded a 30% pay cut.

Filmmakers Jon Alpert and Matthew O'Neill documented the 11-month strike that ensued, capturing the camaraderie of the close-knit workers who hailed from wildly different backgrounds but shared the belief that their solid work ethic would lay the foundation for a decent future for themselves and their families, as it would have in the past.

But with our economy now founded on fictitious, bubble-based fortunes and sleazy sleights of hand, those who actually make -- or in this case, bake -- anything, are expected to accept stagnating or even declining wages even while the affluent few do better than ever. Middle class workers who banked on promised pensions and health care are now portrayed as pariahs and parasites, while the fraudsters who crashed our economy continue to call all the shots, as Frank Rich laments in his scathingNew York debut.

Brynwood refused to provide the union with financial statements to document its claims that the cuts were needed, and was found guilty of bargaining in bad faith. A federal judge ruled that the workers were entitled to their jobs, their pay, and their benefits, and ordered Brynwood to reinstate the workers.

So, the company invited the workers back and promptly announced that it would close the factory. Stella D'Oro was sold to a company named Lance, which shut the factory and moved operations to a non-union factory in Ohio where labor's a lot cheaper. Mission accomplished! Most of the former Stella D'Oro workers remain unemployed; some found a job at another bakery, only to be laid off again a few months later.

When will we stop lionizing business and demonizing labor? GOP hopefuls like Mitt Romney and Herman Cain tout their supposed business acumen as proof that they've got the right stuff to steer our economy out of the ditch. But, honestly, if you've built your financial empire by buying up companies and then driving the workers who are the backbone of those companies right into that ditch, i.e., laying off laborers to boost shareholder profits, why doesn't that qualify you as a job killer?

In a Wall Street Journal op-ed last year, AFL-CIO President Richard Trumka warned that "private equity's wealth extraction business model" creates a "hollow economy." We don't need a CEO in the White House; America is a nation, not a business. And a country where business owners can't figure out how to compensate themselves and their shareholders without screwing their workers is, simply, a country that doesn't work. "No Cookies No Contract" puts a face on the collateral damage brought to us by the Wall Street wizards who'll tell you they're conjuring up value. Value for who?

America's 14 million unemployed aren't competing just with each other. They must also contend with 8.8 million other people not counted as unemployed – part-timers who want full-time work.

When consumer demand picks up, companies will likely boost the hours of their part-timers before they add jobs, economists say. It means they have room to expand without hiring.

And the unemployed will face another source of competition once the economy improves: Roughly 2.6 million people who aren't counted as unemployed because they've stopped looking for work. Once they start looking again, they'll be classified as unemployed. And the unemployment rate could rise.

Intensified competition for jobs means unemployment could exceed its historic norm of 5 percent to 6 percent for several more years. The nonpartisan Congressional Budget Office expects the rate to exceed 8 percent until 2014. The White House predicts it will average 9 percent next year, when President Barack Obama runs for re-election.

The jobs crisis has led Obama to schedule a major speech Thursday night to propose steps to stimulate hiring. Republican presidential candidates will likely confront the issue in a debate the night before.

The back-to-back events will come days after the government said employers added zero net jobs in August. The monthly jobs report, arriving three days before Labor Day, was the weakest since September 2010.

Combined, the 14 million officially unemployed; the "underemployed" part-timers who want full-time work; and "discouraged" people who have stopped looking make up 16.2 percent of working-age Americans.

The Labor Department compiles the figure to assess how many people want full-time work and can't find it – a number the unemployment rate alone doesn't capture.

In a healthy economy, this broader measure of unemployment stays below 10 percent. Since the Great Recession officially ended more than two years ago, the rate has been 15 percent or more.

The proportion of the work force made up of the frustrated part-timers has risen faster than unemployment has since the recession began in December 2007.

That's because many companies slashed workers' hours after the recession hit. If they restored all those lost hours to their existing staff, they'd add enough hours to equal about 950,000 full-time jobs, according to calculations by Heidi Shierholz, an economist at the Economic Policy Institute.

That's without having to hire a single employee.

No one expects every company to delay hiring until every part-timer is working full time. But economists expect job growth to stay weak for two or three more years in part because of how many frustrated part-timers want to work full time.

And because employers are still reluctant to increase hours for part-timers, "hiring is really a long way off," says Christine Riordan, a policy analyst at the National Employment Law Project. In August, employees of private companies worked fewer hours than in July.

Some groups are disproportionately represented among the broader category of unemployment that includes underemployed and discouraged workers. More than 26 percent of African Americans, for example, and nearly 22 percent of Hispanics are in this category. The figure for whites is less than 15 percent. Women are more likely than men to be in this group.

Among the Americans frustrated with part-time work is Ryan McGrath, 26. In October, he returned from managing a hotel project in Uruguay. He's been unable to find full-time work. So he's been freelancing as a website designer for small businesses in the Chicago area.

Justice: What's the Right Thing to Do?

What are our obligations to others as people in a free society? Should government tax the rich to help the poor? Is the free market fair? Is it sometimes wrong to tell the truth? Is killing sometimes morally required? Is it possible, or desirable, to legislate morality? Do individual rights and the common good conflict?

Michael J. Sandel’s “Justice” course is one of the most popular and influential at Harvard. Up to a thousand students pack the campus theater to hear Sandel relate the big questions of political philosophy to the most vexing issues of the day, and this fall, public television will air a series based on the course. Justice offers readers the same exhilarating journey that captivates Harvard students. This book is a searching, lyrical exploration of the meaning of justice, one that invites readers of all political persuasions to consider familiar controversies in fresh and illuminating ways. Affirmative action, same-sex marriage, physician-assisted suicide, abortion, national service, patriotism and dissent, the moral limits of markets—Sandel dramatizes the challenge of thinking through these con?icts, and shows how a surer grasp of philosophy can help us make sense of politics, morality, and our own convictions as well. Justice is lively, thought-provoking, and wise—an essential new addition to the small shelf of books that speak convincingly to the hard questions of our civic life.